7/4/2021 Against The Judgment In Wp(C) ...

vs Indian Oil Corporation Ltd

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Swarnamanjuri Dassi vs Secy. Of State on 22 December, 1927
Marthoma Syrian Company (P) Ltd. vs C.L.Antony on 21 January, 2010

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Kerala High Court

Against The Judgment In Wp(C) ... vs Indian Oil Corporation Ltd

IN THE HIGH COURT OF KERALAAT ERNAKULAM

PRESENT:

THE HONOURABLE THE CHIEF JUSTICE MR.MOHAN M.SHANTANAGOUDAR

&

THE HONOURABLE MR. JUSTICE SATHISH NINAN

WEDNESDAY, THE 23RD DAY OF NOVEMBER 2016/2ND AGRAHAYANA, 1938

WA.No. 1975 of 2016 () IN WP(C).5481/2016

-------------------------------------------

AGAINST THE JUDGMENT IN WP(C) 5481/2016 of HIGH COURT OF KERALA DT. 06-06-2016

APPELLANT(S)/RESPONDENTS 1 & 2:
------------------------------

1. INDIAN OIL CORPORATION LTD.

KOZHIKODE DIVISIONAL OFFICE, 2ND FLOOR,

P.M.K.TOWER, CIVIL STATION POST, WAYANAD ROAD,

KOZHIKODE-673 020.

2. CHIEF DIVISIONAL RETAIL SALES MANAGER

INDIAN OIL CORPORATION LIMITED,

KOZHIKODE DIVISIONAL OFFICE, 2ND FLOOR,

P.M.K.TOWER, CIVIL STATION POST, WAYANAD DISTRICT,

KOZHIKODE-673 020.

BY ADVS.SRI.E.K.NANDAKUMAR (SR)

SRI.M.GOPIKRISHNAN NAMBIAR

SRI.P.GOPINATH

SRI.P.BENNY THOMAS

SRI.K.JOHN MATHAI

SRI.JOSON MANAVALAN

SRI.KURYAN THOMAS

RESPONDENT(S)/PETITIONER AND RESPONDENTS 3 AND 4:

-------------------------------------------------

1. BINU ABRAHAM

S/O. K.J.ABRAHAM, KUZHIKATHOPPIL HOUSE,

MOONNILAVU P.O., KOTTAYAM-686 586.

2. UNION OF INDIA

REPRESENTED BY THE SECRETARY TO GOVERNMENT,

MINISTRY OF PETROLEUM & NATURAL GAS,

NEW DELHI-110 001.

3. MINISTRY OF SOCIAL JUSTICE AND EMPOWERMENT

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ROOM NO.740, 'A' WING, SHASTRI BHAVAN,

DR.RAJENDRA PRASAD ROAD, NEW DELHI-110 001.

R1 BY ADV. SRI.KALEESWARAM RAJ

R2, R3 BY SRI.N.NAGARESH, ASSISTANT SOLICITOR GENERAL

R2, R3 BY ADV. SMT.O.M.SHALINA, CGC

THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 14-11-2016, THE COURT

ON 23-11-2016 DELIVERED THE FOLLOWING:

MOHAN M.SHANTANAGOUDAR, C.J.

&

SATHISH NINAN, J.

-----------------------------------

W.A.No.1975 of 2016

-----------------------------------

Dated this the 23rd day of November, 2016

JUDGMENT

Mohan M.Shantanagoudar, C.J.

1.The judgment dated 6.6.2016 in W.P(C).5481/16 is

appealed against by the Indian Oil Corporation
Limited, respondents 1 and 2 therein, since it is
aggrieved by the observations made in the said
judgment that the Corporation shall obtain fresh land
valuation in the light of the discussions made in
the
judgment and take a decision afresh in the matter
within two months.

2.The first appellant Corporation invited application

for allotment of dealership of retail outlet of the
Corporation in Perinthalmanna town in Malappuram
district under the "Corpus Fund Scheme". The
said
location was reserved for persons belonging to the ST
category. Since the writ petitioner belongs
to ST
category, he also applied for getting the dealership.

WA.1975/16

3. One of the requirements is that the applicant should

arrange for the plot to establish the retail
petroleum outlet. As per Ext.P2 guidelines, the
above location would be taken on lease/purchased by
the Corporation. The offered land can be taken
either from the applicant or from the land owner
directly by the Corporation. The writ petitioner
made Ext.P3 application, providing details of the
offer
from the owner of a plot of land (namely
Dr.Anish Ahamed) in Perinthalmanna town to sell the
plot to
the Corporation at the rate of `6.5
lakhs/cent for setting up the retail petroleum
outlet. The writ
petitioner was selected in ST
category. Relying on the contents of the application
filed by him, letter of
intent was issued in favour
of the writ petitioner. Thereafter, negotiations
were held between the
Corporation and the owner of
the land in respect of the value of the land to be
purchased for
establishing the retail petroleum
outlet. However, the rate quoted by the owner of the
land was higher
than the valuation of the land as
determined by the Government approved valuers. The

WA.1975/16
Government approved valuers had quoted `5.5 lakhs per
cent. The writ petitioner was informed of the
said
fact by the Corporation. Since the price quoted by
the owner of the land is `1,00,000/per cent
higher
than the rate quoted by the Government approved
valuers, the Corporation has not taken steps
on the
application of the writ petitioner to issue him a
letter of appointment. Hence the writ petitioner/
first respondent herein filed W.P(C).5481/16 which
came to be disposed of by the impugned judgment,
with
direction to the Corporation to obtain fresh land
valuation in the light of the discussion made
therein
and to take a decision in the matter within two
months. Being aggrieved by the said conclusion
arrived at by the learned single Judge, this appeal
is presented by the Corporation.

4.Sri.E.K.Nandakumar, learned senior Advocate appearing

on behalf of the Corporation, submits that
the
Corporation is bound by the prescribed guidelines and
it is not open for them to pay higher land
value than
what is approved by the Government valuers. The
price of the land quoted by the owner of
the land is

WA.1975/16
in excess of `1,00,000/cent (Rupees One lakh per
cent) which means
`1,00,00,000/acre (Rupees one crore
per acre) and hence, it may not be possible for the
Corporation to
accept the said valuation. It is open
for the writ petitioner to select another land of
similar dimension
which is feasible in terms of money
as well as other respects in order to get the order
for appointment.
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He further submits that the onus of providing

suitable land is on the applicant. As per the
procedure
followed by the Corporation, prior to
issuance of letter of intent to an applicant, the
land evaluation
committee verifies whether the land
offered is in the advertised stretch or location;
whether the
dimensions etc., of the land meets with
the prescribed requirements, including the special
requirements
if the land is adjacent to a National
Highway; and whether there are any High Tension lines
over the
property and such other impediments that
might stand in the way of establishing a petrol pump
on the
land in question. It is the further case of
the Corporation that the land evaluation committee is

WA.1975/16
not authorized to consider or negotiate on the price
at which the land is offered at that
point of time.
The price of the land is considered/negotiated only
after issuance of the letter of intent to
the
selected applicant. The Corporation cannot be
compelled to and has no legal obligation to purchase
a property irrespective of the rate at which it is
offered. As per the applicable guidelines produced
as
Annexure R1(a) in the writ petition, after the
issuance of letter of intent to an applicant, a three
member negotiating committee is to be constituted and
the land is to be valued by two Government
approved
valuers from the panel empaneled with the
Corporation. The negotiating committee is
required
to attempt to finalize a rate which is lower than or
at the lower of the 2 valuation reports.
However,
for strategic reasons, the committee can offer the
land owner a rate up to the higher of the
two
valuation reports with specific justification. It is
submitted that the letter of intent is not a
commitment to purchase the land at the price at which
it is offered in the application by a candidate.
Lastly, it is submitted that the learned single Judge

WA.1975/16
is not justified in observing that the
two valuers
will have to keep in mind, considering the strategic
location, whether the demand of the
land owner is
unreasonable, arbitrary or inflated and if the demand
of the land owner is not arbitrary,
unreasonable or
inflated, the valuation of the strategic land
concerned should be that of the valuation
done by the
owner; and that since the applicant is a member of ST
community, some leverage should
be shown while
considering such demand of the owner.

5.Sri.Kaleeswaram Raj, learned Advocate appearing on

behalf of the writ petitioner, while arguing in
support of the judgment of the learned single Judge,
contends that the writ petitioner belongs to ST
community and therefore, if the land is not
purchased, it will be denial of an opportunity to an
ST
community member of his livelihood. The very fact
that the letter of intent is issued to the writ
petitioner discloses that the Corporation have agreed
for the proposal made by the owner to sell his
property at `6.5 lakhs/cent. After issuing the
letter of intent, it is not open for the Corporation

WA.1975/16
to stall further proceedings in respect of allotment
of the retail petroleum outlet. He
further submits
that the Corporation ought to have considered the
case of the writ petitioner for award
of temporary
COCO retail outlet against the letter of intent as
there is a direction issued by the central
Government
to oil marketing companies to allot outlets operated
in COCOs to letter of intent holders
belonging to
SC/ST category in case land is not available. In
other words, he submits that in case it is
not
possible for the corporation to accept the valuation
quoted by the land owner at `6.5 lakhs/cent, the
writ
petitioner may be alloted a COCO retail outlet under
special circumstances.

6.Learned single Judge, after hearing the parties and

after verifying the valuation report containing the
valuation of the land made by the Government approved
valuers, has rightly concluded as under:

"8. This Court is of view that the Corporation

cannot deviate from the guidelines in the
matter
of purchase of land. If the value as prepared by

WA.1975/16
the surveyor and the
price of the land offered by
the owner is having disparity, as per the guidelines
as above, at
the best, the Corporation can be
directed to purchase the land based on strategic
reasons, at
the rate of the higher of the two
Government valuation reports; though normally
lowest of
the valuation report has to be relied on.
It is to be noted that the Petroleum Corporation
is a
public sector undertaking, it has to follow
some guidelines for purchase of land, otherwise
it
would result in arbitrariness in purchase of land."

7.However, learned single Judge has proceeded further

to overcome the aforementioned finding, taking
into
account various factors which are not relevant to
decide the matter on hand. Learned single Judge
has
observed that in real property, the market value is
the only component for fixing the land value, but
it
cannot be mere conjectural. The prevailing land
value in surroundings shall be one component but
not
a considerable decisive component. The probable use
of the property in more attractive manner and
non
availability of similar land for strategic purpose
like establishing a petroleum outlet should be

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considered for the purpose of valuation. Relying on

the judgments in the case of Southern Eastern Rail

WA.1975/16
Co. v. L.C.C. [(1915) 2 Ch 252], Sm.Swaranamunjury
Dassi v. Secretary of State for
India-in-Council
[AIR 1928 Cal. 522] and in Alaul Haq v. Secretary of
State for India-in-Council
[(1910) 11 CLJ 393],
learned single Judge has concluded that the land
value has to be in the
perspective of the land owner
who is in an advantageous position to bargain due to
strategic location. If
the valuation is determined
from the perspective of a purchaser, it will be an
erroneous approach.

The sum and substance of the impugned judgment is

that the Corporation can purchase the land for
strategic reasons on higher value as quoted by the
owner of the land. If the demand of the land owner
is
not arbitrary, unreasonable or inflated, the
valuation of the strategic land concerned should be
that of
the valuation done by the owner and not the
valuation done by the purchaser.

8.We are unable to agree with the reasons and

conclusion arrived at by the learned single Judge in
directing the Corporation to obtain fresh land

WA.1975/16
valuation in the light of the discussion
made in the
judgment and to take decision in the matter.

9. There is no doubt that the land owner is in an

advantageous position to quote and bargain about the
price of the property intended to be sold, since he
is the owner of the property. The owner can value
his
property as per his will and wish. But, that
does not mean that the purchaser has no say in the
matter
while agreeing to purchase the property. If
the intending purchaser is not willing to purchase
the
property at a price ultimately quoted by the
owner, nobody can force the owner of the property to
sell
his property for a lesser price. So also, nobody
including the courts can force any person to purchase
a
property at a particular price if the intending
purchaser is not willing to purchase such property at
the
rate quoted by the owner of the property. To
complete a sale, there will have to be a voluntary
agreement between the parties. The sale
consideration will be based on the value agreed to
between the
intending vendor and intending vendee.
In such matters, the courts cannot sit as an

WA.1975/16
appellate authority to guide the purchaser for
purchasing the property for a higher value or for a
particular value. In the case on hand, the
Corporation is bound by the prescribed guidelines.
The
relevant guidelines relating to outright purchase
of the land reads thus:

"10.1. For Outright Purchase of land:

a. The committee would negotiate for outright

purchase and would arrive at the mutually
agreeable rate per Sq.Mtr., which would be
generally lower than or upto the lower of the
two valuation reports. However, in case for
some reasons, the committee feels that
considering the strategic location of the site or
other strategic reasons, there is justification
to
procure the land, then the rate offered to the
landowner can be upto the higher of the two
Govt. Valuation Reports. In such cases, clear
justification will be brought out by the
committee in their recommendations."

10.From the aforementioned guidelines, it is clear that

the negotiating committee would negotiate for
outright purchase and would arrive at a mutually
agreeable rate which would be generally lower than
or

WA.1975/16
upto the lower of the two valuation reports.
However, in certain cases and for certain
reasons, if
the committee feels that considering the strategic
location of the site or other strategic
reasons,
there is justification to procure the land, then the
rate offered by the land owner can be up to
the
higher of the two Government valuation reports. It
is made clear in the very guideline that in such
cases, clear justification need be arrived at by the
committee in their recommendations.

11.The Corporation is not only bound by the guidelines

but also is not willing to purchase the site at
the
rate quoted by the owner of the site in as much as
the committee feels that the rate quoted by the
owner
of the site is on the higher side. The court will
not sit as an appellate authority in such matters to
overturn the decision of the approved Government
valuers. The guidelines are based on certain policy
decision taken by the concerned authorities. Such
policy decisions will not be interfered with by the
Corporation normally, unless such guidelines are per
se unconstitutional or arbitrary. We do not find
any

WA.1975/16
unconstitutionality or arbitrariness in the
guidelines and the decision taken by the
approved
valuers. In view of the same, the observations made
by the learned single Judge and the
conclusion
arrived at cannot be sustained.

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12.We find that the price of the land is

considered/negotiated only after letter of intent is
issued to the
applicant. It is clarified in clause
(2) of Ext.P5 letter of intent that there is no
commitment from the
Corporation for taking the land
offered by the applicant. The Corporation has no
obligation to purchase
the property irrespective of
the rate at which it is offered. As per the
guidelines, a three member
negotiating committee is
to be constituted and the land is to be valued by two
Government approved
valuers from the panel empaneled
with the Corporation. The consideration and
negotiation of rate at
which the property is to be
purchased happen only after the issuance of letter of
intent and not prior to
the issuance of letter of
intent. Moreover, the letter of intent is not a

WA.1975/16
commitment to
purchase the land at the price at which
it is offered in the application.

13.The letter of intent (Ext.P5) clearly reveals that

it is a proposal to offer a retail outlet dealership
to
the applicant. It is also made clear that if the
site offered by the applicant for sale to the
Corporation for
putting up the retail outlet is not
made available for purchase as per the advice of the
Corporation, the
letter of intent will be withdrawn
without any further notice. However, there is no
commitment from
the Corporation for taking the said
land from the applicant or from the owner of the
property.

14.It is not necessary for us to advert to the

arguments of the learned Advocate for the writ
petitioner
with regard to allotment of COCO retail
outlet in favour of the applicant in as much as such
a case
seems to have not been argued before the
learned single Judge though such ground was taken in
the
writ petition. However, in order to satisfy our
conscience, we have gone through the material after

WA.1975/16
hearing the arguments of the learned Advocate for the
applicant to consider the case for
allotment of COCO
retail outlet.

15. The claim of the writ petitioner that there is a

Central Government direction to allot temporary
COCO
retail outlets to applicants who are letter of intent
holders belonging to SC/ST category in cases
where
land is not available, appears to be incorrect in as
much as the current Marketing Plan against
which the
letter of intent is issued to the writ petitioner
clearly states that the availability of land is one
of the eligibility criteria. Further the brochure of
the dealer selection policy clearly spells out that
there
is no commitment for the oil company for taking
over land from the applicant. There is no obligation
under the current Marketing Plan to hand over
temporary COCO outlets to SC/ST applicants who have
been issued with letter of intent. Therefore, in our
considered opinion, the writ petitioner is not
justified
in claiming the COCO retail outlet in its
favour based on the letter of intent till the

WA.1975/16
purchase of the plot is finalised on the terms
acceptable to the Corporation.

Having regard to the aforementioned facts and

circumstances, in our considered view, learned single
Judge is not justified in directing the Corporation
to re-consider the matter in the light of the
observations made at paragraphs 9 to 13 of the
impugned judgment in respect of obtaining fresh land
valuation. Accordingly, the impugned judgment, in so
far as it relates to issuance of direction to the
Corporation to obtain fresh land valuation in terms
thereof, is liable to be set aside. The appeal
stands
allowed.

Sd/-

MOHAN M.SHANTANAGOUDAR
Chief Justice
Sd/-

SATHISH NINAN
Judge
kkb.

/True copy/
PA to CJ


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